Diabetes mellitus is a significant health problem, affecting approximately 16 million people in the United States. Mutations in three of the hepatic nuclear factors (HNF1 alpha, HNF1 beta and HNF4) have been linked to early onset non-insulin dependent diabetes mellitus (MODY), underscoring the importance of the hepatic transcription factors for glucose homeostasis. We have shown through targeted mutagenesis in mice that the winged helix transcription factors HNF3 alpha and gamma are essential for normal glucose homeostasis and hepatic gene expression, respectively. However, gene targeting of HNF3 beta has thus far been not informative in elucidating its potential role in glucose metabolism, as embryos homozygous for a null mutation die at gastrulation. Therefore, we propose to assess the function of HNF3 beta in hepatic development and physiology through conditional gene targeting using the loxP/Cre recombinase system. In preliminary work required for this proposal we have successfully used the Cre/loxP system for liver-specific ablation of the HNF3 beta gene. We have shown that the resulting mice are viable and are completely deficient for HNF3 beta in hepatocytes. Thus, we now have mice available that lack all three HNF3 proteins in the liver, which we propose to use for the analysis of glucose homeostasis and hepatic gene expression singly and in combination. The Specific Aims of this proposal are: first, we will determine whether the HNF3 genes, and in particular HNF3 beta, are required for the differentiation of the hepatic primordium from foregut endoderm. Second, we will investigate whether the HNF3 genes are required for metabolic and hormonal regulation of gene expression in vivo. If our hypothesis is correct, deficiency for one or several of the HNF3 genes will result in an altered pattern of hepatic gene expression and perturbations in glucose homeostasis. In addition, we will investigate the molecular mechanism by which the HNF3 proteins affect transcription. Together these studies will further our understanding of the transcriptional regulation of hepatic differentiation and glucose homeostasis.